Chip Industry - Global Landscape and Future Outlook

Chip Industry - Global Landscape and Future Outlook

Semiconductors have the unusual ability to serve as an insulator or conductor depending on the surrounding environment. The properties of a semiconductor can be affected by temperature, light, electric currents, or even electric fields. The conductivity of an elemental semiconductor is determined by the quantity of valence electrons in its electron shell. Semiconductors are essential to current technology because of this one-of-a-kind property. Integrated circuits, transistors, solar cells, and many other computer materials would not exist without semiconductors. As a result, semiconductor materials have a considerable impact on the supply chain for computing and electronic products.

Chip Scarcity Persists

Most industries have been impacted by the global semiconductor chip shortage, which has hampered supply chains. Reduced chip availability has put the most strain on automotive and consumer electronics firms, which have been compelled to delay product introductions, resulting in predicted revenue losses.

Supply chains may be constricted for the foreseeable future as chip demand continues to rise. That means that everyone, including semiconductor companies and their customers, should work to develop more resilient supply chains and employ just-in-time models only when necessary. Re-examining near- and long-term goals, as well as acting on lessons learned from global manufacturing disruptions, is critical to being better prepared for the future.

Geopolitical Consequences

Due to geopolitical factors, today's mergers and acquisitions are typically smaller and take longer to complete. The climate has not been favorable for larger, cross-border deals in particular. Even as the impacts of COVID-19 continue to exacerbate worldwide chip shortages, a few megadeal prospects have materialized.

Because some corporations are establishing or planning to build their own fabs to secure chip production capacity, geopolitical factors are also affecting the semiconductor sector. Governments all around the globe are developing policies and programmes to help them strengthen or create their place in the global semiconductor supply chain. As a result, we should expect the global semiconductor ecosystem to change as the flow of chips, as well as the hardware and software that goes with them, shifts.

The Competitive Environment is Changing

Many major titans, including Apple, Google, and Amazon, are now developing their own ASIC chips tailored to their respective products. This provides them more control over software and hardware integration while also distinguishing them from their competitors.

For instance, Amazon is currently using Graviton processors that they developed in-house. Similarly, Google just introduced its new Pixel 6 and Pixel 6 Pro phones, which feature Tensor, Google's first AI-capable CPU. Apple's new MacBook Pros for 2021 were based on the company's in-house built M1 processors. Rather than employing the same generic chips as their competitors, these companies believe they can achieve technology differentiation by using custom-made chips that match their applications' specific requirements.

Trends In The Chip Industry

Communication in 5G

The future of 5G technology will have a tremendous impact on the worldwide semiconductor business once it gains prominence. The 5G chipset enables for faster data transfer and processing. These ambitious integrated chipsets will be capable of transmitting data at a rate ten times quicker than 4G. Semiconductors will achieve new requirements in this new ecosystem. Producers will also need to boost the storage, mobile device, and server product potentials.

The Internet of Things (IoT)

The Internet of Things (IoT) in industrial applications is expected to shake up the worldwide semiconductor sector. It will provide semiconductor businesses with a plethora of opportunities. IoT, like domains like silicon photonics, has attracted a lot of attention because of its capabilities. The need for semiconductor chips will increase as more IoT goods reach the market. Advanced Internet of Things devices will have their own analytics and microcontrollers, making them less vulnerable. Semiconductor-integrated IoTs will dominate their presence everywhere, from modern automation systems to connected appliances.

Autonomous Vehicles

Self-driving cars are the next big thing in the automotive business, and they'll be powered by semiconductor chips. Different collaborative operations would be performed by integrated semiconductor chips in next-generation automobiles. Automotive semiconductors will assist these self-sustaining vehicles with superior electronic solutions for increased connectivity, enhanced sensors, battery performance in EVs, automation, and much more. Automotive Artificial Intelligence Software will help self-driving and semi-autonomous vehicles run more efficiently.

Artificial Intelligence (AI)

AI technology has achieved widespread adoption in recent years, allowing businesses to plan for AI-integrated semiconductor chips. This will have a variety of benefits across industries, such as lower operational costs, improved performance and manufacturing speed, increased efficiency and reaction time, and so on. The need for AI-based applications and equipment will have a direct impact on semiconductor businesses' growth prospects. Furthermore, over the projection period, a large increase in research and development, growing use of autonomous robotics across multiple industrial verticals, and high-tech product releases would generate new market possibilities, boosting the artificial intelligence (AI) chip market's growth rate.


The demand for semiconductors has never been higher, and it is anticipated to continue to rise as new technologies emerge, such as 5G, artificial intelligence, and the Internet of Things (IoT). To accommodate this demand, semiconductor production would have to increase, resulting in a tremendous increase in energy and water use.

A single semiconductor fab can need up to 1 TWh of electricity and two to four million gallons of ultra-pure water every day. Leaders in the industry, like TSMC and Intel, are adopting preemptive measures and developing comprehensive sustainability strategies.

For example, to enhance water usage efficiency, TSMC has built numerous water recycling applications through water resource risk management, the expansion of diversified water sources, and the development of pollution control measures. Intel, meanwhile, has revealed its operational sustainability goals for 2030 as part of its mission to become a global leader in sustainability. By 2030, the corporation wants to save 60 billion gallons of water and fund external water restoration projects to reach net positive water consumption. Intel also plans to use 100 percent renewable energy in its global manufacturing processes and save 4 billion kWh of energy in the process.

Conclusion- Possibilities for 2022

In 2022, the semiconductor industry will face a wide range of problems and possibilities, just as it did last year. At Accenture, we take pleasure in staying on top of the newest developments, competitive threats, and global trends. As a result, we are able to advise businesses on the technologies and tactics they require to remain adaptable in the face of change.

Tracking the advancement of technology becomes more difficult as the years pass. While artificial intelligence, 5G, IoT, and self-driving cars are still in their early stages of development, they will have a significant impact on the semiconductor business in the next few years. Micron Technology, Intel Corporation, UTAC Group, Carsem, Powertech Technology, Qualcomm Technologies, and Fujitsu Ltd, among the world's leading semiconductor firms, are rapidly inventing and adapting as they recognise the myriad benefits these technologies may provide. The global semiconductor business offers a wealth of prospects and is poised for a brighter future as a result of continuous technological improvement.

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